Patti Davis, daughter of Ronald Reagan, does not like the current campaign for president:

Many years before my father was governor of California, when America began naming things after John F. Kennedy, I remember thinking how really weird it must have been for his children to have highways and airports named after their father. Now, all these years later, I can say from experience that it truly is a surreal experience. "A traffic accident on the Ronald Reagan freeway…" "Delays at Reagan National Airport…" Believe me, you never really get used to it.

But that’s not nearly as strange as seeing the 2008 presidential candidates try to imitate my father and proclaim themselves more Reaganesque than their competitors. Where is Lloyd Bentsen when you need him? "I knew Ronald Reagan… Senator [or Governor], you’re no Ronald Reagan."

On Friday’s “Today Show”, Mitt Romney again brandished my father’s name, and claimed that, just as Ronald Reagan ended the Cold War, Romney can effectively govern and manage foreign policy in this horribly troubled world.

This, of course, was preceded by Romney’s televised speech about his religion and his personal faith—something my father would never have dreamed of doing because his faith was, well, personal.

Putting Reagan and religion aside, there’s another great issue consuming the 2008 campaign. Who is the more authentic, experienced hunter? Romney has claimed to be a “lifelong hunter.” Huckabee said liar, liar, pants on fire (OK, not his exact words, but close) because Romney has only ventured out twice to slaughter animals. "I think it was a major mistake," said Huckabee, a former Arkansas governor. "It would be like me saying I’ve been a lifelong golfer because I played putt-putt when I was 9 years old and I rode in a golf cart a couple of times." Oh great, now the candidates are worried about miniature golf.

To prove his virility, Huckabee has been photographed in those ridiculous hunting clothes holding a large rifle and several dead pheasants. Lest we forget about God, Huckabee’s campaign offered up a special Christmas advertisement—complete with the now famous “floating cross” behind him—something Huckabee has said was simply a bookcase. Yes, with the books removed and lit with a golden glow that looked like the Star of Bethlehem had been summoned for duty in a political ad.

So, apparently, we are being told that a competent, trustworthy president is someone who brandishes his religion like a neon sign, loads a gun and goes out hunting for beautiful winged creatures, and tries to imitate a past president (who, by the way, never shot a bird or felt the need to imitate anybody.) Lest you think I’m only zeroing in on Republicans, I haven’t forgotten John Kerry’s awkward donning of camouflage for a duck hunt.

I’m getting really nervous for our feathered friends. In this endless campaign, what if more candidates get in on this? Will pheasants be on the endangered species list by November? I’d like to personally plead with Hillary: Don’t even think of picking up a rifle. And please, Barack, we don’t want to see you in an orange vest and a hat with ear-flaps … not a good look for you.

I don’t think I’m alone in my reaction to all of this when I say, "Do you think we’re stupid?" If we want religious evangelism, we can turn on one of those cable channels. If we want leadership, we don’t ask, "Now who has killed the most birds?" And most importantly, when we are thinking about trust and confidence, we don’t look for someone who is trying to mimic anyone else.

Can’t we just leave the ducks, the rabbits, the deer alone, and focus on a world that is aching with strife, that is weighed down by wars and conflicts, not to mention disease and hunger in vast stretches of Africa? Can’t we go back to respecting the privacy of religious faith and stop using God as a campaign tool? And can’t we please, please, please admit that imitation is not the sincerest form of flattery; it’s just an indication that the imitator is going through a serious identity crisis.

Is it safe to predict that the future will be peacefull because the world is in de grip of globalization and economic progres? Here is Bryan Caplan: in the past economic progres and peace have been expanding hand in hand. Logic says it’s save to extrapolate this trend into the future. Good news I would think:

For any conceivable activity there is always, by definition, someone with a comparative advantage in it. So far, so good. However, this does not imply that every activity will actually be performed! Someone, somewhere has a comparative advantage in making silent movies, but that does not imply that anyone will pursue this occupation or continue producing silent movies. Similarly, someone, somewhere, has a comparative advantage in hunting bears with his bare hands, but it doesn’t mean anyone will actually do so. This point underlies my claim that wealth turns men into cowards: Rich people rarely hunt bears with their bare hands, or risk their lives attacking other people.

(...)

In the modern world, how many wars are fought for material gain, anyway? Leaving aside a few Third World countries with valuable natural resources, modern wars don’t pay. The history of post-war Germany is a beautiful example of the deep lesson that it is now cheaper to pay for goods than fight for them.
All we need for world peace, then, is for (a) People to recognize that war doesn’t pay and/or (b) Get so rich that they’re scared to fight even if they falsely believe that it does pay.

And if this seems Utopian, look at the EU. The citizens of dozens of countries that fought like mad for centuries have settled into a peaceful bourgeois existence.

His views on evolution and science are actually quite repugnant and certainly idiotic. He’s not a free trader, and has nasty views about foreigners and immigration. Apart from that he’s a libertarian. So that’s good. However, Megan McCardle looks at his actual proposals and sees some very loose ends. Read it and then ask: is Ron Paul really a libertarian? Is he really planning to do away with the welfare and warefare states? Or is he really just an isolationist, period?

A number of readers want me to really dive into Ron Paul’s economic policies and explain why I don’t like them. Okay, here goes. First up: one of the main areas in which I am supposed to agree with Dr. Paul. That is to say, taxes.

Most of Dr. Paul’s supporters like the fact that he wants to cut taxes. I like the fact that he wants to cut taxes. But how he plans to cut taxes is not so good. In fact, it’s pretty bad.

His website is full of talk about eliminating the income tax, which is not going to happen. His more realistic plans consist mostly of about eighty zillion tax credits, either to replace existing government spending, or to make a warm gesture towards interest groups Dr. Paul thinks are swell, like senior citizens and people serving in the active duty military.

Item one: there is no good reason to replace spending with tax credits. Economically, they are indistinguishable from spending, except that they add all sorts of ugly behavioral inefficiencies.

Item two: they are regressive. Dr. Paul has several plans to replace spending programs with tax credits, which would represent a massive fiscal redistribution away from people who can’t do much with a $15,000 tax credit because they do not have $15,000 worth of taxable income.

Item three: tax credits are economically inefficient, for reasons that I once laid out at great length here.

Item four: tax credits are economically distortionary; they either pay people to do things that they were going to do anyway, or they encourage people to do things that won’t pay for themselves.

Item five: tax credits are much beloved of politicians because they sound magically different from spending, which allows them to distribute goodies to their supporters. If nothing else, this should make any libertarian shudder at the thought of tax credits.

And how will he pay for this tax cuttery? Megan’s First Fiscal Law: spending is taxation. Economically, it doesn’t seem to make much difference whether you finance that spending with taxation or debt; both exert some economic drag, though the mechanisms are different. If you want to cut taxes, you have to cut spending.

Actually, Dr Paul says he agrees with this. So how come his website and collected "issues" writing reveal no major cuts to any programs except his scheme to eliminate the department of education? I mean, I’m all for getting rid of the School Nannies. But observe, please, this graph which I am shamelessly ripping off of Marginal Revolution:

Note, please the category "everything else" which comprises under 17% of the budget. The Department of Education disappears into there, along with transportation, farm subsidies, and everything that is not entitlement spending, defense, and interest on the national debt.

Perhaps he is planning to slash military spending? But then who is going to perform all this border enforcement? And I don’t actually see where he’s planning to make the military smaller; he’s just planning to keep them home. Iraq is expensive, but it’s not expensive enough to pay for the kind of tax cuttery he’s proposing. You’d have to cut the defense budget by a third to produce a 5% reduction in the overall budget.

Entitlements are by far the largest part of our budget; if you’re serious about cutting spending, you need to get serious about attacking entitlements. But Dr. Paul makes no mention of slashing Social Security, Medicare, or Medicaid, and for good reason: the senior lobby would slaughter him. In fact, he’s not only going to leave Social Security benefits intact, but also, he’s planning to eliminate taxation of Social Security benefits. His plan for dealing with the entitlement problem seems to consist of saying that we should keep the federal government from spending the "trust funds". Okay, Dr.; into what financial assets should the government invest this trust funds, and what taxes will you raise, or spending will you cut, in order to plug the several-hundred-billion-dollar hole this will open in the general fund?

Nor are seniors the only ones he plans to cut taxes on. His ideas include no taxes for active duty military, tax credits for health care, tax credits for paying property taxes . . . apparently, the only people Dr. Paul thinks should pay taxes are, well, me, a young urban worker who doesn’t own a home.

He promises to veto new spending. But new discretionary spending is simply not the major driver of our budget. The major driver of our budget is entitlements, which will grow unchecked even if he, and Congress, adjourn to play golf for the next eight years. This is not economically serious, fiscally responsible policy; in fact, it’s just another variant on what everyone else is doing, which is ignoring the entitlement programs that are about to turn into the sucking chest wound of the US budget.

Finally, he sells his fiscal policy with completely unnecessary, not to mention factually deceptive, immigrant-and-trade bashing. His brief on the Import-Export Bank, an FDR-era boondoggle of trivial significance to anything, including the US taxpayer, is positioned as a complaint that we are massively subsidizing China. In fact, the subsidy is tiny, and it’s not aimed at foreigners. We lend poor credit risks in other countries money to buy US goods; it’s an export subsidy, and a particularly stupid one that should be eliminated--without gratuitous fearmongering about China.

Similarly, he attacks the Social Security Administration’s plan for a "totalization" agreement with Mexico, claiming that it will result in the American taxpayer, suddenly and for no apparent reason, sending a ton of money to Mexicans who work here for a little while and then go back to Mexico in order to loll around in the sun collecting their Social Security checks.

This sounds ludicrous because it’s a gross distortion. Totalization agreements are standard practice between countries with social security systems; they prevent people who are working abroad, but planning to retire in their own country, from having to make contributions to two systems. We have totalization agreements with any number of countries, and the actuaries at the SSA expect that the agreement with Mexico will have little impact either way on the trust funds. Indeed, the agreement with Mexico will cost us much less than our agreement with that nation of mooching scabs, the Canadians.

In short, I do not look at this list of proposals and see a bold iconoclast who finally dares to transcend politics, fearlessly doing what needs to be done and speaking truth to power. I see a politician telling his supporters what they want to hear, which is that they deserve to pay lower taxes, but not to have any program that is important to them slashed. I see him scoring cheap campaign points off of American hostility to foreigners, particularly poor foreigners who compete with them economically. And I see him, like everyone else, dodging the major fiscal challenge of our time: the problem of paying for the health care and pensions of the retiring baby boomers.

Megan McCardle says that when labour mobility increases so will tax competition:

It is hard for high levels of taxation to survive a right of exit; Europe has mostly been protected (so far) by its many languages, which make it harder to move. But as the EU increases labor mobility, expect to hear more about harmful tax competition.

What if it is true that trade put downward pressure on wages? What if it is true that trade means rising inequality because of that downward pressure? Some argue that we should suppress trade. Others say not, trade still is a positive sum-game. Instead we should augment the social safety net. Tyler Cowen writes here that this is in fact an odd argument. If labour loses because of trade, then capital wins. It would be no suprise that the return on capital is rising, thanks to globalization. The consequence of this is that redistribution of the gains from labour, trough the safety net is running into diminishing returns. The social safety net is running the risk of being neither social nor safe.

So spreading the increasing gains of capital seems to be the answer. This can be done in two ways. Increasing taxes on capital is one. However, think about the lessons of Peter Lindert. One reason why there is not too much difference in economic growth between the libertarian United States and social-democratic Europe (at least North-Europe) is that in Europe capital taxes generally are lower, not higher. High taxes on capital are bad for investment, bad for productivety growth, and thus ultimately bad for wages which in the long run will be lower because of the lack of investment in instruments/machines that make labour more productive. As Cowen points out, the incidence of taxes on capital in the end will be born by labour.

The second way is more promising: a shareholder economy. Give labour a stake in capital. Don’t forget: the return on capital are increasing. But let’s turn the mike over to Tyler Cowen:

I have yet to see the evidence that trade has a significant negative impact on middle class wages, but for sake of argument assume it is true. However benevolent it may sound, strengthening the social safety net would not be my policy recommendation number one. After all, if Samuelson-Stolper factor price equalization is the main mechanism at work, wages would have a long way to fall downwards and if anyone in the middle class is to keep working, the safety net must eventually be cut, not increased. You might think we can fund all these trade-losers by taxing capital but of course the incidence of taxes on capital sometimes falls on labor, not to mention that at some point the Laffer Curve kicks in.

Is not the appropriate policy recommendation to create a budget surplus, create a U.S.A. Sovereign Wealth Fund, and invest the resulting capital in the corporate winners from this entire process? In other words, we would be giving the trade-losers a more direct share in capital. Since output is rising and wages are falling, the return to capital must be rising; let’s make money off of that.

You might not trust the government with such investments but it is awkward for Krugman to push that argument too hard. Alternatively, you might think that share prices already have capitalized these gains, but that is hard to square with the view that Krugman is reporting a new result about trade. Share prices are driven by liquidity to some extent, and if you know something about the returns to labor and capital that the rest of the world does not, there ought to be a way to make money. Why spend more on consumption (a stronger safety net today) if the rate of return on investment is rising so high and we are going to need even more of a safety net in the future?

Let’s trade: it’s good for consumers, and let’s share...capital. It’s good for workers. Also, the current social safety net can be abolished, so that it is possible to lower labour taxes enourmously, which must be good for the creation of jobs. And the vision of Louis Kelso about full capitalism can finally be realised, globally.

Like with climate change most people would argue, I think, that there exists a scientific consensus as well in favor of free trade, at least among economists. But I’m not so sure. I think there is a consensus, but mostly in favor of mercantilism. At the outset I must define what I mean with mercantilism. Mercantilism is a name for trade policies which favors domestic producers. Infant industry protection for instance is an example of a mercantilist trade policy.
People like Adam Smith, David Ricardo and Richard Cobden were up in arms against such policies. They argued that the interests of ordinary consumers should be the paramount concern of those policies. In their view, only free trade was beneficial for consumers. And so they came to favor free trade over protectionism and mercantilism.

But today the debate does not follow into the footsteps of Smith, Ricardo and Cobden. Instead it has a distinct mercantilist flavor. The debate is about the link between trade and (domestic) economic growth, and the only way to link these two is via (domestic) producers. Now economists do disagree about this link, often vehemently. For each study showing that trade is good for growth and development, there is a paper showing exactly the opposite, another paper saying that there is no link at all, and finally an article showing that the link is just the other way around: growth begets trade.

Take again infant industry protection. I think that most economists, even those generally in favor of free trade, would argue that, at least theoretically, such protection should remain a possibility, at least for developing countries. Some would argue that infant industry protection is unlikely to work in practice, but that it nevertheless can be defended on theoretical grounds. We can think of economists like Paul Krugman, back in his good old days. Others tend to argue that even in practice infant industry protection can lead to better results than free trade. Here we have the names, I think, of Dani Rodrik and Joseph Stiglitz.

The essence of the story is that all of them only think about (domestic) producers. Paul Krugman, I think, would agree that if the practical difficulties of infant industry protection (or strategic trade policy) somehow could be overcome, we should do it, consumers be damned. The fact that consumers would pay for the protection of these (inefficient) domestic industries is not on their radar. The argument about the link between trade and development is a mercantilist argument. It is not the one that should be made by defenders of free trade. But in that case it’s my opinion that there are not many defenders of free trade left, not even among economists.

Adam Smith must be spinning in his grave.

Arnold Kling says that voting for Ron Paul is not the right choice for a real libertarian. What should he do then?

I doubt that libertarianism will be advanced by any campaign for national office. I suspect that the best way to advance libertarianism is not to compete for government office but to compete against government. Earn a living to support your family. Contribute to institutions, such as private schools, that compete with important government institutions. Vote against incumbents, but otherwise stay aloof from political campaigns.

Don Boudreaux is in great form:

Commerce is peaceful. It involves sellers working hard and taking risks to bring to market goods and services that consumers want to buy. No one forces anyone to do anything; all is voluntary.

What truly is crass is politics - that sorry spectacle of power-seeking ego-maniacs who, when not pronouncing platitudes, are promising to help group A by picking the pockets of group B. While commerce is honest, politics is duplicitous. While commerce is peaceful, politics inevitably pits citizen against citizen. Far more enlightened and ethical behavior is on display during any one day in a shopping mall than the most intrepid observer will find in a century on Pennsylvania Avenue.

And to imagine that this guy even doesn’t live in Belgium. Some more. From Voltaire:

Go into the Exchange in London, that place more venerable than many a court, and you will see representatives of all the nations assembled there for the profit of mankind. There the Jew, the Mahometan, and the Christian deal with one another as if they were of the same religion, and reserve the name of infidel for those who go bankrupt.

And this is the best one:

Politicians must have nightmares thinking of the day when all transactions are voluntary. Oh, the horror!

Quite.

The debate about wether and how protectionism can promote economic growth would in a sense be astounding for Adam Smith and David Ricardo. It wasn’t their argument. Their argument was that free trade makes goods cheaper for the poor. And that it did, just look at the results of the repeal of the corn laws. Still, it’s the link between trade and growth that makes modern economists tick. And that’s a little depressing, not only because it distracts from the real issue. Indeed, while the evidence about the old argument seems clear, economists are unable to reach the same clear consensus about the link between growth and openness:

Should developing countries embrace free trade or shelter their nascent industries behind protectionist walls? This debate has been going on for two centuries since Adam Smith faced off against the mercantilists. Ha-Joon Chang’s "Bad Samaritans" (Bloomsbury, 288 pages, $26.95) is a lively addition to the protectionist side of the debate. Readers who believe in free trade will not find much in Mr. Chang that challenges that belief, but the book is well written and far more serious than most anti-globalization gibberish.

Mr. Chang’s main charge is that free trade advocates from wealthy countries are hypocrites, because the history of America and the United Kingdom is full of protectionism. Mr. Chang alleges, with scant evidence, that the two nations grew great because of these tariff barriers. First world economists have reaped the benefits of protection, he suggests, but are now trying to deprive the world’s poor of the wonders of tariffs.

Mr. Chang also takes aim at other free market policies such as privatization and fiscal prudence. Again he argues that since rich countries have public ownership and deficits, it is rank hypocrisy for us to try to forbid them to the poor. An alternative view is that economists shouldn’t be required to endorse the worst policies of their own countries.

While it is easy to quibble with some of Mr. Chang’s more bizarre statements about American political history, such as his claim that "slavery was not as divisive an issue in antebellum politics as most of today believe it to have been," he is certainly correct that America was quite protectionist during the 19th and early 20th centuries. First Alexander Hamilton, then the Whigs, and finally the G.O.P. all fought for tariffs. While Abraham Lincoln did much to make men free, his support for tariffs made him less of an advocate of free markets.

The most curious thing about Mr. Chang’s retelling of American history is his suggestion that there is anything secret about this history of American protectionism. The Tariff of Abominations and the Smoot-Hawley Tariff are both mainstays of high school history classes; Honest Abe’s affinity for tariffs even appears in popular movies about the Great Emancipator.

The book would have made a more serious contribution if it shed more light on whether American or English protectionism helped or harmed these countries. Post hoc does not imply propter hoc. Nineteenth-century America was protectionist, but that doesn’t mean that protectionism played a positive role in our nation’s growth. Did American protectionism really give us the textile mills of Lowell and the steel mills of Pittsburgh? Did English tariffs really foster the spinning jenny and the steam engine? The high physical costs of crossing the Atlantic in the age of sail made it natural, with or without tariffs, for the Lowells to want to weave cotton on this side of the pond. Mr. Chang is going to have to do better than just point out that Americans and Englishmen had tariffs to make the case that tariffs produced growth.

There is a substantial empirical literature that looks at the relationship between trade openness and economic development over the last 40 years. An early wave of research, associated with Jeffrey Sachs among others, claimed that trade openness increased growth. A second wave of research, led by Francisco Rodriguez and Dani Rodrik (a Harvard colleague), suggested that there was little robust connection across countries between trade and growth. My own research in this area found that openness had little impact on middle income places, but is particularly valuable for the poorest places. Certainly, there is no empirical consensus that openness is either good or bad for growth.

The lack of consensus on the connection between growth and openness does not imply that Mr. Chang’s protectionism is equally attractive as the open borders urged by the Washington consensus. Adam Smith and David Ricardo didn’t urge free trade because trade begets growth, but because trade makes goods cheaper for ordinary people. Smith’s argument is still the strongest case for open borders. Even if protectionism does encourage industrial growth, it only does so by hurting ordinary people, who have to pay more to buy the goods of inefficient domestic producers.

Mr. Chang’s protectionist brief suggests that the costs that tariffs impose on ordinary consumers are worth paying since the government can use tariffs to promote the right industries. Smith would have been skeptical about putting such faith in the government, and today’s developing countries certainly deserve no more trust than the government of George III. Even if an incredibly wise tariff policy could protect future economic dynamos, the history of tariffs suggests that they are used more often to protect less than dynamic cronies.

The best thing to come out of this book is its challenge to the advocates of free markets to explain why England and America did so well despite embracing policies that were not always that free. Mr. Chang has not made the case that those policies were helpful, but free marketers have an obligation to help us understand why those policies did not do more harm.

Santa is a capitalist, Nicolas..well, a saint. A real one, it appears. Even a super one. Take your pick:

ST. NICHOLAS was a super-saint with an immense cult for most of the Christian past. There may be more icons surviving for Nicholas alone than for all the other saints of Christendom put together. So what happened to him? Where’s the fourth-century Anatolian bishop who presided over gift-giving to poor children? And how did we get the new icon of mass consumerism in his place?

Well, it’s a New York story.

In all innocence, the morphing began with the Dutch Christians of New Amsterdam, who remembered St. Nicholas from the old country and called him Sinte Klaas. They had kept alive an old memory — that a kindly old cleric brought little gifts to the poor in the weeks leading up to the Feast of the Nativity. While the gifts were important, they were never meant to overshadow the message of Jesus’s humble birth.

But today’s chubby Santa is not about giving to the poor. He has had his saintly garb stripped away. The filling out of the figure, the loss of the vestments, and his transformation into a beery fellow smoking a pipe combined to form a caricature of Dutch peasant culture. Eventually this Magic Santa (a suitable patron saint if there ever was one for the burgeoning capitalist machinery of the city) was of course popularized by the Manhattanite Clement Clarke Moore published in “A Visit From St. Nicholas,” in The Troy (New York) Sentinel on Dec. 23, 1823.

The newly created deity Santa soon attracted a school of iconographers: notable among them were Thomas Nast, whose 1863 image of a red-suited giant in Harper’s Weekly set the tone, and Haddon Sundblom, who drew up the archetypal image we know today on behalf of the Coca-Cola Company in the 1930s. This Santa was regularly accompanied by the flying reindeer: godlike in his majesty and presiding over the winter darkness like Odin the sky god returned.

The new Santa also acquired a host of Nordic elves to replace the small dark-skinned boy called Black Peter, who in Christian tradition so loved St. Nicholas that he traveled with him everywhere. But, some might say, wasn’t it better to lose this racially stereotyped relic? Actually, no, considering the real St. Nicholas first came into contact with Peter when he raided the slave market in his hometown and railed against the trade. The story tells us that when the slavers refused to take him seriously, he used the church’s funds to redeem Peter and gave the boy a job in the church.

And what of the throwing of the bags of gold down the chimney, where they landed in the stockings and little shoes that had been hung up to dry by the fireplace? Charming though it sounds, it reflected the deplorable custom, still prevalent in late Roman society when the Byzantine church was struggling to establish the supremacy of its values, of selling surplus daughters into bondage. This was a euphemism for sexual slavery — a trade that still blights our world.

As the tale goes, Nicholas had heard that a father in the town planned to sell his three daughters because his debts had been called in by pitiless creditors. As he did for Black Peter, Nicholas raided his church funds to secure the redemption of the girls. He dropped the gold down the chimney to save face for the impoverished father.

This tale was the origin of a whole subsequent series of efforts among the Christians who celebrated Nicholas to make some effort to redeem the lot of the poor — especially children, who always were, and still are, the world’s front-line victims. Such was the origin of Christmas almsgiving: gifts for the poor, not just gifts for our friends.

I like St. Nicholas. You can keep chubby Santa.

Me? More than ever, advantage Santa. :)

A classic:

Bryan Caplan speculates about the consequences of a Ron Paul presidency. Something really libertarian could come out of it. But maybe it’s good the United States has such a fine constitution:

What would happen if Ron Paul actually became president? First, I’d have to write a $200 check to Walter Block. But what would happen next?

There are some major changes that Paul could make unilaterally. He really could recall U.S. troops from not only Iraq and Afghanistan, but all over the world. I believe he would really do so, and despite the radicalism of this change, I’m confident that these orders, however unpopular, would be obeyed. Perhaps there would be a 2% chance of a coup if he made the changes overnight, but that’s about it.

Furthermore, there are a number of "executive order" policies that he could change with the stroke of a pen. If I understand the law correctly, the president could unilaterally end affirmative action in federal hiring (and the hiring of federal contractors). And he could probably stop federal prosecutions for the sale of medical marijuana.

So what else could President Paul do on his own? He certainly couldn’t abolish the Federal Reserve or return to the gold standard on his own, so whatever you think about that plan, it’s not going to happen. In fact, Paul could not abolish any law unless half of both houses of Congress went along with him. And since he is probably the most libertarian politician in either house, almost all of the laws Paul wants to abolish would survive his presidency.

What Paul could do is stop or dilute new laws, including the budget. If you want to abolish old laws, gridlock works against you; but if you want to stop new laws, gridlock works in your favor. No new law could pass unless 2/3 of both houses wanted it. Given Paul’s extremism, his opponents would have to heavily moderate any new statist legislation to make it veto-proof. The same goes for the budget: Since Dr. No would probably veto any budget that Congress would pass, fiscal conservatives could and probably would hold out for substantial spending cuts. And this is on top of the massive peace dividend Paul’s unilateral foreign policy changes would realize.

Bottom line: Even if, like Megan McArdle, you think that Paul is "utterly insane," anyone with moderate libertaran sympathies (and no desire to crusade against "Islamo-Fascism") would probably be pleased by the policy consequences of Paul’s presidency. In fact, it would take a radical like Paul to get moderate libertarian change.

Gee, it’s almost as if the Constitution had built-in checks and balances!

The Economist on the new American Gilded Age:

IN 1904 Willie Vanderbilt hit a thrilling 92.3 mph (147.7 kph) in his new German motorcar, smashing the land-speed record. His older brother’s sprawling North Carolina manse, Biltmore, could accommodate up to 500 pounds of meat in its electrical refrigerators. In miserable contrast, the below-average Gilded Age American had to make do with a pair of shoes and a melting block of ice. If he could somehow save enough for an icebox, a day’s wage would not have bought a pound of meat to put in it. Paul Krugman, of Princeton University, has recently argued* that contemporary America’s widening income gap is ushering in a new age of invidious inequalities. But a peek at the numbers behind the numbers suggests that Mr Krugman has been misled: far from a new Gilded Age, America is experiencing a period of unprecedented material equality.

This is not to deny that income inequality is rising: it is. But measures of income inequality are misleading because an individual’s income is, at best, a rough proxy for his or her real economic wellbeing. Because we can save, draw down savings, or run up debt, our income may tell us little about how we’re faring. Consumption surveys, which track what people actually spend, sketch a more lifelike portrait of the material quality of life. According to one 2006 study**, by Dirk Krueger of the University of Pennsylvania and Fabrizio Perri of New York University, consumption inequality has barely budged for several decades, despite a sharp upswing in income inequality.

But consumption numbers, too, conceal as much as they illuminate. They can record only that we have spent, but not the value—the pleasure or health—gained in the spending. A stable trend in nominal consumption inequality can mask a narrowing of real or “utility-adjusted” consumption inequality. Indeed, according to happiness researchers, inequality in self-reported “life satisfaction” has been shrinking in wealthy market democracies, America included, suggesting that the quality of lives across the income scale are becoming more similar, not less.

You can see this levelling at work in markets for transport and appliances. You no longer need be a Vanderbilt to own a refrigerator or a car. Refrigerators are now all but universal in America, even though refrigerator inequality continues to grow. The Sub-Zero PRO 48, which the manufacturer calls “a monument to food preservation”, costs about $11,000, compared with a paltry $350 for the IKEA Energisk B18 W. The lived difference, however, is rather smaller than that between having fresh meat and milk and having none. Similarly, more than 70% of Americans under the official poverty line own at least one car. And the distance between driving a used Hyundai Elantra and a new Jaguar XJ is well nigh undetectable compared with the difference between motoring and hiking through the muck. The vast spread of prices often distracts from a narrowing range of experience.

Save money. Live better
This compression is not a thing of the past. To take one recent example, Jerry Hausman of the Massachusetts Institute of Technology and Ephraim Leibtag of the United States Department of Agriculture, show† that Wal-Mart’s move into the grocery business has lowered food prices. Because the poorest spend the largest part of their budget on food, lower prices have benefited them most. The official statistics do not capture these gains.

As a rule, when the prices of food, clothing and basic modern conveniences drop relative to the price of luxury goods, real consumption inequality drops. But the point is not that in America the relatively poor suffer no painful indignities, which would be absurd. It is that, over time, the everyday experience of consumption among the less fortunate has become in many ways more similar to that of their wealthier compatriots. A widescreen plasma television is lovely, but you do not need one to laugh at “Shrek”.

This compression is the predictable consequence of innovations in production and distribution that have improved the quality of goods at the lower range of prices faster than at the top. New technologies and knock-off fashions now spread down the price scale too fast to distinguish the rich from the aspiring for long.

This increasing equality in real consumption mirrors a dramatic narrowing of other inequalities between rich and poor, such as the inequalities in height, life expectancy and leisure. William Robert Fogel, a Nobel prize-winning economic historian, argues†† that nominal measures of economic well-being often miss such huge changes in the conditions of life. “In every measure that we have bearing on the standard of living...the gains of the lower classes have been far greater than those experienced by the population as a whole,” Mr Fogel observes.

Some worrying inequalities, such as the access to a good education, may indeed be widening, arresting economic mobility for the least fortunate and exacerbating income-inequality trends. Yet even if you care about those aspects of income inequality, the idea can send misleading signals about the underlying trends in real consumption and the real quality of life. Contrary to Mr Krugman’s implications, today’s Gilded Age income gaps do not imply Gilded Age lifestyle gaps. On the contrary, those intrepid souls who make vast fortunes turning out ever higher-quality goods at ever lower prices widen the income gap while reducing the differences that matter most.

This last we can see on a global scale as well. There is a huge debate about the trend in global income inequality. Some say it is rising, others contend it’s declining. However, the real issue is that the gap is narrowing in almost everything that matters: height, education, health, life-expectancy, the spread of technology.

I think I know what to do tomorrow. This must be fascinating. Dennet, Dawkins, Hitchens, Harris together in a debate. Here is part one:

Toshiba is developing a nuclear reactor for use at home. Any takers?

If we lived in a world where everyone was (a) smart and (b) trustworthy, Toshiba’s micro-sized nuclear reactor, small enough to fit in the basement or a large shed, would be a slam-dunk solution to the energy/climate crisis.

Twenty foot long by six foot wide, the reactors produce 200kW of energy and run themselves: the entire thing is manufactured with the fuel within, and when it runs out, they can just send a truck to pick it up.

An historical document. The transcript of the conversation between Saddam Hussein and U.S. ambassador April Glaspie; eight days before the Iraqi invasion of Kuwait:

July 25, 1990 - Presidential Palace - Baghdad

U.S. Ambassador Glaspie - I have direct instructions from President Bush to improve our relations with Iraq. We have considerable sympathy for your quest for higher oil prices, the immediate cause of your confrontation with Kuwait. (pause) As you know, I lived here for years and admire your extraordinary efforts to rebuild your country. We know you need funds. We understand that, and our opinion is that you should have the opportunity to rebuild your country. (pause) We can see that you have deployed massive numbers of troops in the south. Normally that would be none of our business, but when this happens in the context of your threat s against Kuwait, then it would be reasonable for us to be concerned. For this reason, I have received an instruction to ask you, in the spirit of friendship - not confrontation - regarding your intentions: Why are your troops massed so very close to Kuwait’s borders?

Saddam Hussein - As you know, for years now I have made every effort to reach a settlement on our dispute with Kuwait. There is to be a meeting in two days; I am prepared to give negotiations only this one more brief chance. (pause) When we (the Iraqis) meet (with the Kuwaitis) and we see there is hope, then nothing will happen. But if we are unable to find a solution, then it will be natural that Iraq will not accept death.

U.S. Ambassador Glaspie - What solutions would be acceptab le?

Saddam Hussein - If we could keep the whole of the Shatt al Arab - our strategic goal in our war with Iran - we will make concessions (to the Kuwaitis). But, if we are forced to choose between keeping half of the Shatt and the whole of Iraq (i.e., in Saddam s view, including Kuwait ) then we will give up all of the Shatt to defend our claims on Kuwait to keep the whole of Iraq in the shape we wish it to be. (pause) What is the United States’ opinion on this?

U.S. Ambassador Glaspie - We have no opinion on your Arab - Arab conflicts, such as your dispute with Kuwait. Secretary (of State James) Baker has directed me to emphasize the instruction, first given to Iraq in the 1960’s, that the Kuwait issue is not associated with America. (Saddam smiles)

On August 2, 1990, Saddam’s massed troops invade and occupy Kuwait. _____

Baghdad, September 2, 1990, U.S. Embassy

One month later, British journalists obtain the the above tape and transcript of the Saddam - Glaspie meeting of July 29, 1990. Astounded, they confront Ms. Glaspie as she leaves the U.S. Embassy in Baghdad.

Journalist 1 - Are the transcripts (holding them up) correct, Madam Ambassador?(Ambassador Glaspie does not respond)

Journalist 2 - You knew Saddam was going to invade (Kuwait ) but you didn’t warn him not to. You didn’t tell him America would defend Kuwait. You told him the opposite - that America was not associated with Kuwait.

Journalist 1 - You encouraged this aggression - his invasi on. What were you thinking?

U.S. Ambassador Glaspie - Obviously, I didn’t think, and nobody else did, that the Iraqis were going to take all of Kuwait.

Journalist 1 - You thought he was just going to take some of it? But, how could you? Saddam told you that, if negotiations failed , he would give up his Iran (Shatt al Arab waterway) goal for the Whole of Iraq, in the shape we wish it to be. You know that includes Kuwait, which the Iraqis have always viewed as an historic part of their country!

Journalist 1 - American green-lighted the invasion. At a minimum, you admit signaling Saddam that some aggression was okay - that the U.S. would not oppose a grab of the al-Rumeilah oil field, the disputed border strip and the Gulf Islands (including Bubiyan) - the territories claimed by Iraq?

(Ambassador Glaspie says nothing as a limousine door closed behind her and the car drives off.)

Statements like these make me cringe:

Australians want to be coerced into voting. They are happy to vote, knowing that everyone else is voting, too. Countries worried about low voter turnout would do well to consider their compulsory model.

Australians want to be coerced? It makes them happy? How does he know that? I live in a country with a compulsory model. Do Belgans want to be coerced into voting? Are they happy with it?

The state apparently reserves for itself the right to coerce people into anything, even voting, even happiness. Such omnipotence, which we would not accept in the case of a private company, should be resisted.

George Orwell, reading this, would be turning in his grave.

"Linux" Torvalds channels Darwin and Hayek:

You know what the most complex piece of engineering known to man in the whole solar system is?

Guess what - it’s not Linux, it’s not Solaris, and it’s not your car.

It’s you. And me.

And think about how you and me actually came about - not through any
complex design.

Right. "sheer luck".

Well, sheer luck, AND:
- free availability and _crosspollination_ through sharing of "source
code", although biologists call it DNA.
- a rather unforgiving user environment, that happily replaces bad
versions of us with better working versions and thus culls the herd
(biologists often call this "survival of the fittest")
- massive undirected parallel development ("trial and error")

I’m deadly serious: we humans have _never_ been able to replicate
something more complicated than what we ourselves are, yet natural
selection did it without even thinking.

Don’t underestimate the power of survival of the fittest.

And don’t EVER make the mistake that you can design something better than what you get from ruthless massively parallel trial-and-error with a feedback cycle. That’s giving your intelligence _much_ too much credit.

Intelligent guy.

Why was Al Gore awarded the Nobel Price for Peace? According to the Nobel Committee’s explanation:

Extensive climate changes may alter and threaten the living conditions of much of mankind. They may induce large-scale migration and lead to greater competition for the earth’s resources. Such changes will place particularly heavy burdens on the world’s most vulnerable countries. There may be increased danger of violent conflicts and wars, within and between states.

So preventing extensive climate changes decreases the danger of wars. In this way Gore is a promoter of peace. Bad luck for the Committee:

Helga Malmin Binningsbø, Indra de Soysa and Nils Petter Gleditsch, from NTNU’s Department of Sociology and Political Science, looked at the environmental pressures in 150 countries in the period from 1961 to 1999. By using an internationally recognized technique for measuring a country’s environmental sustainability –“The Ecological Footprint” – the researchers were able to compare these numbers with statistics on armed conflict during the same period.

Their conclusion may seem paradoxical—lands where resources are heavily exploited show a clear connection to a lack of armed conflict. Or alternatively, nations troubled by war during the research period had lower exploitation rates of their natural resources. The findings give researchers solid empirical support for stating that environmental scarcity is not the reason behind violent conflict.

--A higher Ecological Footprint is negatively (!) correlated with conflict onset, controlling for income effects and other factors, the researchers say in their article, published in the peer-reviewed journal Population and Environment.

So let’s get this straight. Al Gore got the Nobel price for Peace because his advocacy for tackling climate change is increasing the risk of war? This must be the news of the year.
(Hat tip: Lubos Motl)

Bolton’s book. Badly written and uninteresting. Other than that, highly recommended, for some:

A controversial stint as American ambassador to the United Nations can be a good career move. Both Daniel Moynihan in the 1970s and Jeane Kirkpatrick in the 1980s became famous for their fierce anti-communism and outspoken defence of Israel.

John Bolton - who served as US ambassador to the UN in 2005-2006 - stands very much in this tradition. He will certainly not disappoint his conservative fan club with his scathing criticism of the "high-minded" and self-serving elite who he believes runs the UN. They are not the only objects of his scorn. The US state department gets it in the neck, so does the "Eastern Establishment" and the EUroids (his term for European diplomats), with their tiresome obsession with multilateral diplomacy.

But Bolton is a much less interesting figure than either Kirkpatrick or Moynihan. His illustrious predecessors were genuine intellectuals. Moynihan did pioneering work on the welfare state; Kirkpatrick developed important ideas on the distinction between authoritarianism and totalitarianism. Bolton, however, is not interested in ideas - and his book suffers as a result.

This is not to say that Bolton is stupid. He has a lawyer’s tenacity and command of detail. But, while he is prepared to devote pages and pages to listing the reactions of individual senators to his nomination to the UN, he spends frustratingly little time explaining his approach to the world. Perhaps his principles - American nationalism and a distrust of international institutions - seem so self-evident that they require no elucidation. But it means that Bolton will often make striking statements and then fail frustratingly to expand on them.

In a chapter on arms control, he writes that he saw international "treaties as essentially only political documents, and the whole debate over what was ’legally binding’ in ’international law’ as just another theological issue". This is a statement full of interesting implications - particularly for anyone who might, in future, try to negotiate a treaty with Bolton. But the former ambassador just leaves it at that.

A lack of intellectual curiosity might not matter if Bolton were a gifted storyteller, or interestingly introspective. But that is not the case. If he has ever had difficult personal or moral choices to make, he is not letting on. At one point, he does acknowledge that he took steps to avoid being drafted to fight in Vietnam. He writes: "I made the cold calculation that I wasn’t going to waste time on a futile struggle," adding: "Looking back, I am not terribly proud of this calculation." The whole episode is dealt with in a paragraph.

Many people of Bolton’s generation made similar decisions. But it would be interesting to hear a little more on this subject, from a man who has given his book the bellicose title Surrender is Not an Option. When it came to Vietnam, surrender was not an option for Bolton because he never got close enough to the enemy to make it feasible.(Chicken hawk alert!, Ivan)

Bolton is a strikingly stilted writer, which makes his book rather lifeless. At one point he records a car ride to the UN in the company of President George W. Bush. "I observed that both Bill and Hillary Clinton had graduated a year ahead of me from Yale Law School and Bush said: ’Before you had the moustache?’ to the general merriment of the ladies in the car." Perhaps you had to be there.

Like many gut conservatives, Bolton sees himself as an outsider and hates the idea that "elites" are looking down on him. The British seem to rub him up the wrong way and he got on very badly with the UK delegation to the UN. He writes: "Many Brits believed that their role in life was to play Athens to America’s Rome, lending us the benefit of their superior suaveness and smoothing off our regrettable colonial rough edges."

The fact that Bolton found it so hard to get on with one of America’s closest allies suggests that he was not ideally cut out for the role of diplomat. That is not a verdict that would upset Bolton, who gloried in the role of cussed outsider. And, to be fair, there were times when his unwillingness to go along with the UN consensus was vindicated. His refusal to endorse the new UN Human Rights Commission has been amply justified.

Those with a professional interest in issues such as nuclear proliferation or UN reform will probably want to read what Bolton has to say. American conservatives might also be tempted to buy the book. But overall this is a disappointing work. Bolton writes badly, cannot tell a story and has no interesting new ideas. Other than that, highly recommended.

Here is a fine analogy. Suppose you are a blogger. And suppose you did become one because you aren’t satisfied with the way the regular press is reporting and commenting on current events. For instance, you are a right-wing blogger and you see the press - maybe rightly so - as dominated by at least the liberal and sometimes even more radical left. You especially are fed up with all the talk about the need for a multicultural society and for all the pleas in the left-wing press to open the borders for asylum seekers and economic immigrants. Regulating illegal immigrants? The horror! We should close our boders and protect our own culture (and economy against competition).

Now here is the analogy. Bloggers are illegal immigrants themselves.

According to Borjas, there is "an important self-serving economic motive at play" when journalists decry the effect of blogging on traditional news-reporting.

It doesn’t cost all that much to become a citizen journalist: a computer and your own time is about all it takes for you to start reporting your view of the world to whoever wants to read it.

The laws of supply and demand suggest that the rewards to being a Journalist would drop because anyone can now start reporting news and opinionating a la Paul Krugman or Maureen Dowd. It’s as if the Journalistic profession has received its own influx of illegal immigrants -- increasing competition, lowering rewards, and creating havoc along the way.

Maybe now the Journalists will learn how those workers affected by immigration have long felt.

A a former freelance writer, reporter, editor and now blogger, I found this passage interesting for a couple of reasons. Journalists -- or at least those journalists who ever competed in the freelance market or interned at a publication for laughable pay -- have always understood the challenge posed by competition from people willing to work for low wages. No one needs a license or accreditation of any kind to be a journalist, and a distressingly large number of people are willing to work for free or close to it. Just the sight of a byline in print (or online) is compensation enough for some. One result of this is that per-word pay rates for freelance journalists have hardly budged over the decades, except for the very top tier of publications.

Even more intriguing, however, are the political implications of Borjas’ analogy. I would submit that most journalists who honestly accept what the Internet means for their profession understand that there is no way to go back to the way it was before. The barriers to entry, such as they were, are gone forever. ... Competing successfully in this environment will require being really good at whatever one does -- whether that be blogging, investigative reporting, breaking news reporting, financial analysis or what have you. And even if done well, the financial rewards may indeed be less lucrative than in ages past. ...

To think that one can turn back the tide of competition unleashed by the Net is a lot like thinking that in a globalized world one can ameliorate the wage impact of illegal immigration by building a border fence or by passing laws imposing strict sanctions against employers who hire illegal immigrants. The work forces of China and India and eastern Europe and of course Mexico have joined the world economy just like bloggers have joined the media universe. ...

[T]o compare bloggers to illegal immigrants is to implicitly acknowledge that fence-building is not going to work... And we know that can’t have been Borjas’ intention, because his other posts have made abundantly clear that "securing our borders" is his first priority in any discussion of immigration policy.

On the Net, some of us just chuckle at such an idea. Borders? What borders?

Not much to argue with here. The only viable strategy to combat climate change, if that really is your priority, is to bring the developing countries into the game. But we have to do it in such a way that we do not curb their development instead of curbing emissions. Again, Bjorn Lomborg (and the United States) gets vindicated:

As the developing world ramps up its greenhouse-gas emissions, what should our top priority in climate-change policy be?

The critical issue is that no strategy will work unless it is consistent with developing countries’ continued economic growth. So we are unlikely to be able to reduce the use of “dirty” energy enough – either through carbon taxes or through a “cap and trade” permit system – unless we can find a cheap clean substitute. And that requires innovation.

Developing countries are not going to give up the immediate aspirations of their (often growing) populations for climate-change benefits that are largely in the future. Worrying about preserving the environment for our great-grandchildren is a luxury developing nations do not have.

China, for example, stresses even in the Forward to its “National Climate Change Programme” that “economic and social development and poverty eradication are [its] first and overriding priorities” – hardly a surprise when the latest figures show 300 million of its people live below the World Bank’s dollar-a-day poverty line, and perhaps 100 million are illiterate.

Although China will this year overtake the US to become the world’s number one polluting nation, its officials state that it “does not have the obligation to cut emissions”. Nicolas Sarkozy is right to suggest taxing China’s exports based on their embodied emissions, but this threat gives us only limited leverage over it.

So China will do little for which it is not compensated; this is probably the binding constraint on any deal. (India matters hugely too, of course, but its per-capita emissions are so much lower that it will probably accept any deal we offer China.)

What follows?
First, whether we like it or not, China (and India and others) are going to continue to develop nuclear energy. So unless the West continues to develop it too, the safety and storage and handling issues will be resolved in environments with less democratic accountability than in Europe and the US, and with more pressure to take shortcuts than in richer countries.

Second, China (and India and others) will continue to exploit their enormous coal reserves. So we urgently need research and development on lower cost Carbon Capture and Storage (CCS) technologies to remove coal plants’ emissions. The UK government is right to subsidise a demonstration CCS plant. It should probably subsidise several. It is also right to insist that the technology chosen is one that can be retrofitted to traditional plants. China is building one such plant every five days.

Crucially, however, it will always be cheaper to burn coal (and oil and gas) without CCS than with it. We can encourage developing countries to use CCS through a revised Clean Development Mechanism or – better - by including them in an Emissions Trading Scheme that allocates them enough permits that they make money by participating. But Western electorates will only be willing to transfer limited resources to the developing world. There may also be problems monitoring whether CCS technology is being used as claimed.

So CCS alone will not suffice. Only clean energy sources that are cheaper than those currently available are likely to prevent further emissions growth in the developing world.

If large-scale nuclear power is politically unacceptable, substantial investment in clean energy R&D is the only alternative. But the private sector will not do this unaided. Businesses know that when an innovation is sufficiently important, the innovator gets little of the benefit: the developers of drugs for AIDS, and of vaccines for Anthrax and bird flu were threatened with compulsory licenses in many countries (including in the United States) until they "voluntarily" licensed their innovations cheaply.

The difficulties of getting effective patent protection in the first place, the riskiness of much energy R&D, and the large scale of some of the necessary investments (for example, research into fusion) are further reasons why business is reluctant to undertake the needed R&D without subsidies.

So it is catastrophic that public expenditure on energy R&D has been falling in most countries over the last 30 years, and it is shameful that Europe spends a much smaller fraction of GDP on public energy R&D even than the USA and Japan. The UK is one of the worst offenders.

There are other priorities too, of course. In particular, curbing deforestation is cheap and cost-effective, and has the collateral benefit of preserving biodiversity.

But more R&D into clean energy is probably the highest priority of all. Finding a clean energy source that is cheaper than those currently available is the only politically-plausible way of curbing continuing growth in developing nations’ emissions.

Suppose there was a country in Africa actually with a rather well functioning government and with thriving markets and trade. Then the foreign traders arrive. The only "commodity" they are interested in is labour, slave labour. The slave trade begins. State functions are fatally weakened and ultimately destroyed. Commercial and market development stalls. Ethnic fractionalization reduces the provision of all those goods important for economic growth (transportation, education, health, access to water....). Five centuries later that country still is dirt poor.

This story really happened, many times over. Indeed, according to this study the slave trade even now is the most important cause of the current underdevelopment of many African countries. And it were the most advanced ones that were selected and thus took the greatest hit. Poor but violent countries escaped the slave trade:

Sustained trade did not occur until the Portuguese found the Kongo Kingdom, located just south of the Zaire river. Because the Kongo Kingdom had a centralized government, national currency, and well developed markets and trading networks, it was able to support trade with
the Europeans.

When European demand turned almost exclusively to slaves, the preference to trade with the most developed parts of Africa continued. Because the more prosperous areas were also the most densely populated, large numbers of slaves could be efficiently obtained if civil wars or conflicts could be
instigated.

As well, societies that were the most violent and hostile, and therefore least developed, were often best able to resist European efforts to purchase slaves.

From Anonymous:

Hydrogen is a light, oderless gas which, given enough time, changes into people.

I think it should be: has changed.

We already did now that hunting, not global warming, remains the biggest threat for the continuing existence of polar bears. So a very cheap solution for saving this species is to forbid hunting. A very expensive solution would be to curb emissions of carbon dioxide. And now a new study suggests that the polar bear will manage a warming climate just fine, thank you. A little more warmth isn’t nearly as deadly as putting some big and sharp metal in their bodies, it seems (but rewarding nonetheless):

"We have this specimen that confirms the polar bear was a morphologically distinct species at least 100,000 years ago, and this basically means that the polar bear has already survived one interglacial period," explained Professor Ingolfsson.

"And what’s interesting about that is that the Eeemian - the last interglacial - was much warmer than the Holocene (the present).

"This is telling us that despite the ongoing warming in the Arctic today, maybe we don’t have to be quite so worried about the polar bear. That would be very encouraging."

It survived the last interglacial, but will it survive the hunters?

Against war, regulation and corporate fraud. Ludwig Von Mises:

I have been re-reading Nation, State and Economy and here are two quotes from the beginning of the book that I think are amazingly relevant to our contemporary world and the debates about our future:

"It is forgotten that libreralism was always pacifistic and anti-militaristic ..."

"To the statist school of economic policy, an economy left to its own devices appears as a wild chaos into which only state intervention can bring order. The statist puts every economic phenomenon on trial, ready to reject it if it does not conform to his ethical and political feelings. It is then the job of state authority to carry out the judgment pronounced by science and to replace the botch caused by free development with what serves the general interest. That the state, all-wise and all-just, also always wishes only the common good and that it has the power to fight against all evils effectively --- this is not doubted in the slightest."

So when asked what alternative vision of the political future I hold than that offered by the contemporary landscape it is this --- Misesian liberalism. That we don’t seem to be on a path to achieving that is a source of frustration for me. I am not whining as one of our readers suggested, I am stating a fact.

Liberalism in the hands of Mises was the "progressive" form of libertarianism that Horwitz talked about. Read Mises’s Liberalism, it is a doctrine of freedom and toleration; of free trade and free thought; of free mobility of capital and labor internationally as well as domestically. A world of private property and freedom of association and contract, is a world of toleration of ’experiments in living’ and entrepreneurship. The terminology of "left" and "right" is not appropriate for this, but the terms cosmopolitan and parochial may be.

Paul Krugman is such a bore. This time he goes after Ron Paul who is against regulation which requires companies to monitor their record keeping in order to prevent corporate fraude. Krugman’s conclusion? Because Paul is against regulation he is for corporate fraud. Can please someone explain to Krugman what a non sequitur is? And Justin Rietz points out that Krugman’s argument goes against the American legal system: innocent until proven guilty. When it comes to his adversaries Krugman’s kind of liberal does not seem to have a conscience at all.

A new report undermines the Kyoto-protocol and supports the position of the United States, that is, invest more in the invention and development of new technologies so that developing countries can grow economically without increasing C02-emissions. You can’t read this conclusion in the papers, so Tim Worstall spells it out for you:

The Guardian flags up a new paper on carbon emissions from the UK economy. The way that reads, we’ve all been lying about having reduced emissions. The actual paper itself is rather more interesting.

Instead of looking at how much carbon we produce in the UK economy, let’s look at the amount of carbon emissions we consume. Net off the carbon associated with our exports and our imports and so on. It’s an interesing approach and one that, at least as these preliminary figures show, leads to the conclusion that we’ve increased the emissions associated with the UK way of life rather than decreased them.

The reason being that, at least in part, we don’t really have much heavy industry any more thus we import the emissions from steel and aluminium making etc along with the products themselves.

But of course the really interesting thing is to ponder on what we should do about this new information?

The first thing is of course to abandon Kyoto, as this measures emissions by place of production, not consumption, and as the paper shows these two measures can move in different directions.

The second is that we should of course be trying to reduce emissions in total, rather than by where they are either produced or emitted. We should, for example, be buying New Zealand lamb as that has lower total emissions than UK produced. Or Spanish tomatoes rather than hothouse raised British ones.

But it also means that we should be investing in the technologies which allow that heavy industry to continue to exist but with lower emissions.

Which, largely speaking, has been the thrust of US policy on climate change, to invent and deploy such technologies in countries like China where the things are actually made. Odd that The Guardian doesn’t reach that conclusion really.

Why oh why can’t we have a better press corps?

Maybe this can put the discussion of trade and agricultural subsidies a little bit in perspective. Trade between Africa and Europe had much to do with comparative advantage with Africa exporting agricultural products to us and Europe exporting manufacturing goods to Africa. And with all those subsidies, Europe still has a general trade deficit, not a surplus, and a deficit in agricultural goods in particular:

The EU is the largest trading partner and largest export market for every almost every country in Africa.

The European Union has an overall trade deficit with Africa. In 2006 the EU imported €126 billion in goods from Africa. It exported €93 billion worth of goods to Africa. The EU has a trade deficit with Africa in agricultural goods, textiles and energy products. It has a surplus in trade in machinery, chemicals and transport equipment.

Where did the expression "laissez-faire" come from? From "laisser nous faire": leave us alone. It was uttered by a business man fed up with the coporatism and dirigism of Jean-Baptiste Colbert. And it was more of an argument against government help than against government regulation, which is, in my libertarian view quite significant. It means that "laissez-faire" in the first place was directed against the nanny-state, rather than the regulating state. Here is Gavin Kennedy:

the words were first uttered by a merchant in the French dirigiste regime of M. Jean-Baptiste Colbert (1619-1683), the French minister of finance under Louis XIV. The merchant’s name was M. Le Gendre, described as a ‘most sensible and plain spoken’ merchant and, reportedly, he responded to Colbert’s question: ’Que faut-il faire pour vous aider?’ (what do you want from me to assist you?), with: ’laisser nous faire’ (leave us alone). Colbert was the finance minister whose regulation of merchants was notorious for its oppressive licensing, inspection and control which personified French bureaucracy at its worst (plus ça change …).

Jean Vincent, Seigneur de Gournay, popularised a version of Le Gendre’s appeal to be freed of petty regulation, but the author who took Le Gendre’s words, dropped ‘nous’ and turned laissez nous faire’ (let us alone) into ‘laissez faire’ (let alone) into a principle of economic policy, was the Marquis d’Argenson (1694-1757), who was an active promoter of economic theory and a member of the world’s first economics club (salon), the Club d’Entresol (1726). He was also a Foreign Minister of France at the Court of Louis XV for two years. He did not publish his ideas, but circulated them, as was the custom, in manuscripts around the French intelligentsia. To govern better, he said, one must govern less. The true cause of the decline of our manufactures, he declared, is the protection we have given to them. Interestingly, Francois Quesnay, for example, did not include laissez faire in his General Maxims of Government.

‘Laissez faire’ was first used in English by George Whatley, a contemporary, friend and correspondent of Benjamin Franklin in 1774. Keynes reported that Jeremy Bentham in 1793 used the expression ’laissez-nous faire’. Bentham, who was not an economist, presented ‘the rule of laissez-faire, in the shape in which our grandfathers knew it’, adapted into the service of the Utilitarian philosophy. For example in A Manual of Political Economy, he [Bentham] writes: ’The general rule is that nothing ought to be done or attempted by government; the motto or watchword of government, on these occasions, ought to be - Be quiet ... The request which agriculture, manufacturers, and commerce present to governments is as modest and reasonable as that which Diogenes made to: Stand out of my sunshine.’

William J. Bernstein’s book The Birth of Plenty starts, I think, with the fundamental truth of modern economic history: finding the holy grail of permanently raising the welfare of every citizen is the quintessional contribution of the West (and Europe in particular) to the world. Yes, the Chinese and the Arabs, they built great empires and civilizations. The Chinese were the inventors of paper, the printing press, gunpowder...The Arab empires were oases of learning and culture. The mathematicians of India devised a numerical system while incorperating the concept of zero. Yet, not they, but the West is responsible for the birth of modern wealth, not just for the rulers or the elite, but for the ordinary citizens. How did the West do this? According the Bernstein there are four "inventions" that gave us all the modern wealth: property rights, scientific rationalism, capital markets, improvements in transport and communication. At the moment and in the recent past some non-Western countries have become better than us in playing our own game. Some are worried about this. I think this should be reason to be proud. Prosperity, at last, has become a global phenomenon.

Economists in general agree on the benefits of competition. With more competition countries will grow faster, the economy will become more productive and in the end everyone gains in wealth. Even unions, will expressing some doubts, in general say that more competition is better. Socialist parties are convinced that we need to increase competition in sectors like energy. They argue that it wil lower prices, which is true.

Still, no one in particular likes to compete. Business leaders and organisations in public will always pay lip service to the gospel of competition. But no particular company likes competition. If they can they always will seak some government protection against it. Intellectual property rights are an instrument, but there are many others (zoning regulations, reduced shopping hours and on and on). They way to get that protection is rather easy: brandish the competition as unfair. And so the Chinese and Indians now and the Japanese and the Koreans in the past were unfair competitors. The question of course is: unfair to whom? To those who aren’t adaptable, inventive or strong enough to compete? Well, in that case the have no place in the business world anyway. On the other hand competition isn’t unfair for consumers because it means lower prices.

Likewise, immigration means competition. There will be more people competing for a job (however, demand will create supply - more jobs will be created, and economic immigrants generally go the places where there are plenty of jobs anyway). And that of course is unfair. Still the benefits of competion are again huge. Not consumers, but the immigrants themselves gain enormously. So it would be easy to tax those gains and compensate domestic workers. Immigrants still would gain, the economy would gain (competition!), and no one else would loose. A Pareto-efficient policy. So why don’t we have it? Because no one likes competition. Most people accept it as a given and most people will agree with the view that is a benefit to have more competition than less. As long a others have to compete it is fine, otherwise it isn’t and we all clamour to the government for protection. What a pity:

Immigration hawks like George Borjas have estimated that wage competition from immigrant labour may reduce native, unskilled worker earnings by something like 7 percent. Other researchers dispute such figures, arguing that immigrant impact on native, unskilled workers wages is minimal and is strongly positive for skilled labour. In either case, it’s clear that the gains enjoyed by the migrants themselves significantly exceed domestic worker losses.

This suggests that by regularising the status of incoming labourers and taxing off a portion of the surplus they earn from migrating we could compensate domestic workers for any harm they experience. To that tax revenue, we could also add the massive amounts of money currently spent fighting immigration--billions of dollars per year, and growing. It’s almost certain that under such a regularisation and redistribution approach all parties involved would be better off than they currently are.

Hugo Chavez, the flamboyant ruler of Venezuala, is a man of the poor. So his defenders say. But is this really so? It does not appear to be so. Another case of socialism as a way to get a hold on state power, not as an ideology of helping the poor:

The most commonly cited statistic in defense of the Chávez-helps-the-poor hypothesis is the decrease in poverty rates, from 42.8 percent when he took office in 1999 to 33.9 percent in 2006. But this decrease is neither unprecedented nor surprising, given that the Venezuelan economy is in the midst of an economic expansion fueled by a five-fold increase in global oil prices since his first term began. Historically, drastic declines in poverty in Venezuela are associated with periods of substantial real exchange appreciation similar to the current one. The last such episode, which lasted from 1996 to 1998, coincided with an even larger decline in the poverty rate, from 64.3 percent to 43.9 percent. The fact that Venezuela is presently running a fiscal deficit despite unprecedented global oil prices signals that the current improvement, just like previous ones, will sooner or later be reversed.

A full reading of Venezuela’s health and education statistics shows no signs of the dramatic turnaround in well-being often claimed by the Chávez government and its supporters. For instance, the percentage of newborns who are underweight actually increased from 8.4 to 8.8 percent between 1999 and 2004. The infant mortality rate has declined, but it has been declining steadily since the 1940s. There isn’t even much evidence that the government is trying to do more for the poor. The average share of social spending, excluding social security, has actually decreased during the Chávez administration (29.3 percent for the period from 1999 to 2004, in contrast to 31.5 percent for period from 1990 to 1998 before Chávez was in office).

The biggest challenge to evaluating Chávez’s success in poverty reduction is disentangling fantasy from reality in official announcements and data. One example is the government’s claim of having eradicated illiteracy by teaching 1.5 million Venezuelans how to read and write. Several colleagues and I analyzed the veracity of this claim by studying official Venezuelan government data. According to our estimates, in the second school semester of 2005, there were still 1,014,441 illiterate Venezuelans over the age of 15, only slightly less than the estimate of 1,107,793 people at the start of the program. Even this small reduction can be traced back primarily to changes in the demographic composition of the population.

Similar inconsistencies can be found almost everywhere in the government claims. The administration says it mobilized more than 3 percent of the labor force to work in social programs called misiones, but official employment statistics show no evidence that these people were ever employed, and official budget figures show no evidence that they were ever paid. Estimates of the percentage of Venezuelans with access to sanitation services derived from government data are also inconsistent with official claims of large improvements.

There are lies, damned lies, and government statistics.

There is good news form Iraq, which doesn’t get into the mainstream press. From Wired:

Today, Fallujah is calm: Shops are open, kids are in school, men are smoking their cigarettes and holding hands in outdoor cafs. "The people just decided they couldn’t take al Qaeda anymore," says George Benson, executive officer of the marines’ Second Battalion, Sixth Marine Regiment, Regimental Combat Team Six, which is responsible for the town.

(Hat tip: Greg Mankiw)

Yes, some immigrants are muslim fanatics and terrorists. They will try to kill us. And some will refuse to assimilate. But most immigrants are clever and hard-working and are yearning for a job. Part of their income will buy our products. We need them, they keep our economy running.

Yes, some bacteria can harm and even kill us. But many of those illegal immigrants are industrious, hard-working and even friendly. They keep us alive. We need them. Fortress Europe will thus be as bad a decision as Fortress Human Body:

It turns out that the indiscriminate killing of harmless microbes damages the body in complex ways we are only beginning to understand. Meanwhile, the bad germs are pretty much unstoppable. A few have proved susceptible to vaccines, but under attack the rest simply become hardened and infinitely resourceful, forcing a continuous escalation of weaponry.

In dozens of interviews with scientists and patients, Ms. Sachs, a veteran science journalist, has done yeoman’s work tracing out all the complexities of our current unhappy relationship with the microbial world.

We host more bacteria than we ever realized: new DNA technology has found hundreds of previously unrecognized species in the traditional stomping grounds of mouth and intestine, and traces of bacteria even in tissues previously thought to be sterile. Further, our indwelling organisms apparently communicate constantly with one another, both within individual colonies and also among species. Powerful antibiotics introduced into this complex environment cause mayhem, much like a series of bombs tossed into a market square.

When the peaceful activities of a normal microbial population are disrupted, malevolent bacteria may take full advantage of the opportunity to strike. The intestinal infection C. difficile colitis, now rampaging through hospitals around the world, is one such complication of antibiotic use.

In addition, many scientists now subscribe to the theory that the creation of an unnaturally microbe-free environment is at least partly responsible for the modern explosion of allergic and autoimmune diseases. Without routine early exposure to a wide array of microbes, the immune system may become jumpy and frightened, overreacting violently to harmless substances like pollen, peanuts or even the body’s own cells.

Finally, there is the problem of antibiotic resistance. Microbes exposed to antibiotics evolve dozens of biochemical tricks to inactivate or evade them, and then can pass the tricks around on fragments of DNA.

Drug-resistant tuberculosis and staph infections are treated like breaking news, but in fact these problems have been with us for decades. Eleanor Roosevelt died of drug-resistant TB in 1962, while a 1958 outbreak of fatal drug-resistant staph infections unfolded quite similarly to the one we face today.

What is new is the emerging consensus that the way to combat antibiotic resistance may not be bigger, better, stronger antibiotics but, rather, no antibiotics at all. Instead, other molecular weapons with the ability to disable bad germs without bothering good ones are the key, although for the most part these molecules remain on the drawing board.

In the meantime we are left with the bizarre contradictions of the modern drugstore, with antibiotic capsules in the pharmacy, antibacterial hand wipes by the cashier, dairy products touting their “good” bacteria in the food aisle, and capsules of even better bacteria over by the vitamins, right next to the industrial-strength colonic purges that Dr. Metchnikoff himself would endorse.

Ms. Sachs gives the last word to Joshua Lederberg, the Nobel-winning molecular biologist: “It would broaden our horizons if we started thinking of a human as more than a single organism. It is a superorganism that includes much more than our human cells.”

In other words, perhaps we should stop trying to live within an inviolate fortress. The melting pot may prove as happy an image for the body human as it is for the body politic.

F.A. Hayek once wrote a piece explaning why he was not a conservative. If Ayn Rand would still be alive today she probably would write a piece with the same message but then about neoconservatism. She indeed would not be a neoconservative. Neither, as a libertarian, am I. Here is why.

Here is someone who actually reads the IPCC-report:

The reports are now in part out and webbed, and I started by looking over "Summary for Policymakers" from the Working Group II report. It makes an interesting contrast with the news stories. For instance:

"Globally, the potential for food production is expect to increase with increases in average temperature over a range of 1-3 degrees centigrade, but above this it is projected to decrease."

Or in other words, given the predicted temperature increase of .2 degrees/decade, global warming will tend to increase food production for at least the next fifty years, and perhaps as much as the next hundred and fifty. Has anyone noticed that prediction in news stories about the report?

"Globally, commercial timber productivity rises modestly with climate change in the short- to medium-term, ... "

I also like "Nearly all European regions are anticipated to be negatively affected by some future impacts of climate change, ... ." Note the "some." It’s hard to imagine any substantial change in the world, good or bad, for which which the statement would not be true.

Also note, from Chapter 2, that the projections of sea level rise "are smaller than given in the TAR due mainly to improved estimates of ... " TAR appears to be the 2001 estimate, if I understand it correctly. Perhaps I missed it--did any news story report that fact?

As Tim points out, the IPCC is now hedging its sea level predictions--in part by pointing out the uncertainty, in part by saying what might happen over thousands of years and adding that they can’t be certain it won’t happen over mere centuries. But the six scenarios they provide numbers for give predictions ranging from a low of .18 meters to a high of .59 meters--about two feet. The bulk of that is from thermal expansion, so actual melting of continental ice would have to be several times as high as their estimate in order to substantially increase it.

I am, of course, selecting bits from the post that support my point--that the news stories are hype, selecting out negative predictions, often very uncertain ones, and ignoring positive predictions and ambiguity. There are other bits of the report that do indeed support a negative view of the consequences.

Another point that struck me was how much of the report depended not on climate science, however good or bad that may be, but on social science, especially economics. My guess, from a quick look over it, is that those results are very uncertain and might easily get the sign of the effects wrong.

People adjust to change--they vary the crops they grow, the areas under cultivation, where they live and the like in response to changing climate. If you assume no such adjustment--not, I think, what the IPCC is doing--then the net result is almost certainly negative. With enough adjustment, taking advantage of opportunities produced by, for example, longer growing seasons, the net result can be positive. It’s not clear how they know, or how they can know, how much adjustment will actually take place. I am reminded, perhaps unfairly, of just how bad the predictions in _Limits to Growth_ turned out to be.

Wars between states can be illegal. When Nato intervened in Kosovo for instance the resulting war was considered to be illegal because there was no green light from the United Nations. In the same vein the war in Iraq is illegal too. Still, states have find a way out: illegal yes, but also legitimate. This way out is only available for states. Individuals would not get away with it. Suppose I would defend myself thus: yes, downloading music or movies for free without paying royalties obviously is illegal, but it still is legitimate. Would I - anyone - get away with it? Why should states have more rights than individuals?